BANKING AFFAIRS

Detailed explanation-1: -The Angel Tax is being levied on startups at 30.9% on net investments in excess of the fair market value. And many startups were retrospectively assessed for this tax, years after their fundraising.

Detailed explanation-2: -Under Section 80-IAC, the Startup incorporated after April 1, 2016 is eligible for getting 100% tax rebate on profit for a period of three years. in any of the 7 consecutive assessment year. Also, the annual turnover must not exceed Rs. 25 crores in any financial year in which the deduction is claimed.

Detailed explanation-3: -Post getting recognition a Startup may apply for Tax exemption under section 80 IAC of the Income Tax Act. Post getting clearance for Tax exemption, the Startup can avail tax holiday for 3 consecutive financial years out of its first ten years since incorporation.

Detailed explanation-4: -Section 56(2) VII B of the Income Tax Act, colloquially known as the ‘angel tax’ was first introduced in 2012 to deter the generation and use of unaccounted money through the subscription of shares of a closely held company at a value that is higher than the fair market value of the firm’s shares.